The study also stated that the lack of a sizable, adjacent headquarters hotel caused planners of major events to take their business to other cities.
Scott Beck, president and chief executive officer of Visit Salt Lake, said Salt Lake City's lack of a large convention center hotel property has cost the city many conventions.
Beck said that when a large convention like the Outdoor Retailer trade show comes to town, organizers have to contract with 34 hotels to get the needed number of rooms for their group. But in cities with a "headquarter hotel" — a same-sized group is able to contract with just 15 hotels because the overall setup is more conducive to their needs.
“If we don’t continue to improve our product (the Salt Lake market), then we will lose market share,” he said. “There are so many things that make us one of the best second-tier convention destinations in the country, (but) we may lose out on the increased opportunity to maximize the convention center.”
Beck said that while some critics worry that existing hotels would be hurt by the development of a convention center property, he said other hotels would benefit by “compression.”
“When the convention center is full, the hotels around the convention center fill first,” he said. “They 'compress' the demand out into the community — pushing the business out into those other hotels.”
He also cited a 2011 University of Denver study that he said indicated, “Every market with a convention center hotel over the last 10 years has outperformed the national average.”
He estimated that the local market loses $90 million to $100 million of convention delegate spending annually due to the lack of a convention center hotel.
Some local business leaders have also expressed conditional support for a new hotel.
In a June opinion letter on the issue, Lane Beattie, president and CEO of the Salt Lake Chamber, along with Downtown Alliance executive director Jason Mathis said a new hotel would enhance Utah's tourism industry.
“Many of our competing cities have one — Denver, Phoenix, San Antonio — and Salt Lake City should consider one as well,” they wrote. “A large, 1,000-room hotel adjacent to the Salt Palace will generate more local and state taxes from out-of-town delegates and bring more business to Utah restaurants, entertainment venues, transportation companies and retail stores. More citywide conventions filling the Salt Palace will ultimately also mean more guests spilling over to other hotels.”
The letter, however, opposed the use of government or local tax dollars to finance the project. They instead pushed for “privately led” development after diligent review of possible financing options for such a project by the Salt Lake County Council.
Meanwhile, opponents of government assistance said there is no room for outside intervention when it comes to a getting the project built.
"Salt Lake City and Salt Lake County should stay out of the business of business,” said Royce Van Tassell, vice president of the Utah Taxpayers Association. “If demand for a 1,000-room convention center hotel exists, private investors will be more than happy to build it."
The Utah Restaurant Association and Utah Hotel and Lodging Association are on the same page as the Utah Taxpayers Association.
“Salt Lake City has been rising for several years, and we did not see any of the major hotels in Salt Lake City add additional rooms to their facilities,” said URA president and CEO Melva Sine.
“Many have made improvements, but none have added additional sleeping rooms. When a 1,000-room hotel is needed and can be successful financially, the private sector will build it and that's the type of development we need in all sectors of our economy.”
"UH&LA does not oppose a privately funded convention center hotel, but it opposes taxpayer funding to support competition for our member hotels," executive director Jordan Garn said. "We welcome competition in the market place. We just want to make sure the playing field is level."
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